On april 1, 2014, the kb toy company purchased equipment to be used in its manufacturing process. the equipment cost $59,800, has an ten-year useful life, and has no residual value. the company uses the straight-line depreciation method for all manufacturing equipment. on january 4, 2016, $14,750 was spent to repair the equipment and to add a feature that increased its operating efficiency. of the total expenditure, $3,200 represented ordinary repairs and annual maintenance and $11,550 represented the cost of the new feature. in addition to increasing operating efficiency, the total useful life of the equipment was extended to 12 years.

1. prepare journal entries for the depreciation for 2014 and 2015.

2. prepare journal entries for the 2016 expenditure.

3. prepare journal entries for the depreciation for 2016.

Suppose that jim plans to borrow money for an education at texas a& m university. jim will need to borrow $25,000 at the end of each year for the next five years (total=$125,000). jim wishes his parents could pay for his education but they can’t. at least, he qualifies for government loans with a reduced interest rate while he is in school. he has a special arrangement with aggiebank to lend him the money at a subsidized rate of 1% over five years without having to make a payment until the end of the fifth year. however, at the end of the fifth year, jim agrees to pay off the loan by borrowing from longhorn bank. longhorn bank will lend him the money he needs at an annual interest rate of 6%. jim agrees to pay back the longhorn bank with 20 annual payments and the payments will be uniform (equal annual payments including principal and interest). (i) calculate how much money jim has to borrow at the end of 5 years to pay off the loan with aggiebank. a. $121,336 b. $127,525 c. $125,000 d. $102,020 e. none of the above